The Flux Capacitor: 005

THE FLUX CAPACITOR SEPTEMBER 002010 / ISSUE 005

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15 Steps for Strategic Alliances (and marriage)

By Rosabeth Ross Kanter, Harvard Business Review Wedding bells fill the Northern Hemisphere air for this season's happy couples. Among the newlyweds armed with pre-nuptial agreements are numerous companies starting strategic alliances, joint ventures, and focused collaboratives.

Unlike full-blown mergers, in which two really do become one because one company disappears, alliances and partnerships resemble modern marriages: separate careers, individual checkbooks, sometimes different names, but the need to work out the operational overlap around household and offspring.

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For many years, I've helped major companies and other organizations extract value from their strategic alliances or watch them disappear. I've developed a 15-step guide to ensuring success as every stage of the relationship, from courtship to ongoing success (first reported in my book World Class).

So here is my business marriage counseling advice. Any resemblances to personal marriages or advice for June newlyweds are strictly intentional.

1. Be open to romance, but court carefully. At the beginning of new relationships, selective perceptions reinforce dreams, not dangers.

Potential partners see in the other what they want to see, believing what they want to believe. Hopes, dreams, and visions should be balanced by reality checks.

2. Know yourself. Build your strengths. An organization seeking partners should identify assets that have value to partners and strengthen them. Networks of the weak do not survive. The best alliances join strength to strength.

3. Seek compatibility in values. In rapidly changing environments, compatibility in values, philosophy and goals is more important than specific features of an immediate business deal. The basis for collaboration must THE FLUX CAPACITOR

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be more enduring, and there must be a foundation for mutual trust to help weather inevitable changes or problems.

4. Treat the 'extended family' respectfully. Include other partners and stakeholders.

Rapport between leaders of partner organizations is not enough. Other people and organizations who are the 'relatives' in each organizations' extended family must also be won over.

5. Put the lawyers in their place. Leader-to-leader relationships are important.

Partnerships and network formation shouldn't be turned over to third-party professionals, such as staff analysts, lawyers, consultants, or deal-brokers.

6. Vow to work together until business conditions do us part. Commit to a first project, to exploring growth in the relationship, to monitor change, and to remain friends if changing conditions require a graceful exit.

7. But don't count on the contract. Formal agreements can't anticipate everything, and interpretations of the agreement vary — even within the same organization.

8. So keep communicating, face-to-face. Matters are more easily sorted out when partners' leaders keep talking long after their initial dealmaking and dedicate people to watch over the relationship — a partner or alliance 'ambassador' (the equivalent of key account managers).

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9. Spread involvement.

Create more ties for more people. Alliances begin with a few direct connections among top leaders. As projects unfold, more people at more levels must get involved, and they need to feel connected, too — that they know their counterparts in their partner organization. The more people feel included, the more they have a chance to see the others face-to-face and come to know them, the easier it will be to implement partnership activities.

10. Build organizational bridges — formal structures.

Active collaboration occurs when organizations develop structures, processes, and skills for bridging organizational and interpersonal differences and getting value from the relationship. Bridges include formal governance (a partnership board), joint project teams, and alliance ambassadors.

11. Respect differences.

Alliances, partnerships, and networks are most helpful when they involve differences — when partners give each other something they do not already have. But differences in "specialty" desired by partners are accompanied by more "inconvenient" differences in behavioral style, motives and goals, operating methods, or cultural assumptions. Respect is essential. Time must be invested in understanding differences and transcending them.

12. Teach partners. Learn from partners. People from across the partnership network must become teachers as well as learners.

Often the ultimate value of a partnership is the new knowledge and skill it brings.

Organizations that derive greater value from their alliances tend to have greater communication internally, share more information, and promote an atmosphere of learning.

13. Be prepared to change yourself. Partners must be willing to be influenced by one another. To make linkages possible requires operating compatibilities, project by project and sometimes even in a larger sense. This can mean learning the other's language and style or inventing a new one; changing to the other's system or creating a joint one.

14. Help everyone win.

Mutuality is the hallmark of organizational collaboration.

Balancing benefits so that each partner gets something of equivalent value can be hard to do in the short run, but it is essential in the long run.

The best alliances try to maximize the value of the whole relationship, which then makes it more valuable to each partner.

15. Get closer, change course, or exit gracefully.

Like living systems, relationships evolve. Change should be expected. But the best guarantee that organizations will be closer in the future is success in what they try to achieve today.

Success strengthens relationships.

To ensure that your partnerships are effective, apply these principles at every stage of the relationship. Then toast the benefits of happy marriages!

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Moving from strategy to storytelling THE FLUX CAPACITOR

By Roger Martin Corporate strategists often struggle with strategic options. First, there's a lot of worrying about what they have to come up with to make the proposed option credible: they spend hours on SWOT analyses and spreadsheets, which gives them reasons to kill their ideas at worst and can slow down the process of coming up with ideas at best.

Then there's the existential angst: is my option kind of silly and I will be laughed at for offering it up? A lot of ideas die then and there. Even if strategists do come up with a well argued idea, they may still worry about treading on other people's toes, and quietly consign it to the dustbin. And after all that soul searching, they may just end up with an idea that's just too sensible to be interesting, and so they kill it.

If this sounds like you, then I submit that you're taking your strategy-making process far too seriously. You're treating strategic option generation as a construction exercise — I am going to build an option, and it has a bunch of pieces to assemble, all of which have to fix logically together in an

airtight way. Otherwise, it isn't legitimate.

But this just makes it all way too hard. Your high standards tend to choke off and/or delay the production of options. And this is one reason why strategy processes so often produce a bunch of options that aren't decisively more interesting than the current strategy — yet require lots and lots of work to generate and analyse. Plus all that work and anguish tends to make participants edgy and they are inclined to pick at one another's options rather than treat them as interesting additive thoughts.

My solution? Think about a strategic options as being just a happy story about the future. It doesn't have to be right and it doesn't even have to be sensible. It just has to result in your organization being in a happy place in the future. In fact, if it were absolutely right and utterly sensible, your company would probably already be doing it.

It doesn't have to be constructed analytically. It is a holistic story — here is where we would find ourselves

playing and how we would see ourselves winning. The only real requirement is that it be a happy, aspirational story.

If it isn't happy, it isn't worth being an option in the first place.

If every participant tells one another a happy story, the group will have a wonderful list of options — and quite quickly, because participants won't feel that they have to work super hard and be terribly careful and be highly logical. The standard on all of those dimensions is brought way down. Meanwhile, the creativity is elevated way up — because these are just stories; happy stories.

When you have assembled the happy stories/options, you can then begin to deploy the most important question in strategy: what would have to be true? For each individual story, what would have to be true for it to be a terrific choice? Work backward from an attractive possibility to see what would have to be true to make this a feasible and attractive option.

That is the dead-easy way to produce great strategies.

Identity Crisis - Brand vs. User

By Derrick Daye, The Blake Project Everyone knows there's a critical difference between Brand imagery and User imagery. A brand's personality tells a story about the product.

It tells its target market what to expect. It suggests heritage, quality, flavor, status, effectiveness, attractiveness, service, value, when to use it, where to use it, how to use it, etc. Potent brands create rich www.Futures-studies.org

pictures in the eye of the consumer.

User imagery, on the other hand, generally refers to one of two possibilities.

For many products, User Imagery often represents the ego ideal of interested people - who I want to appear to be because I use your product; vs. the "shadow" or "not me"

among those who reject the product - it's who I don't want to be associated with and therefore would not want to use the product. Often, User Imagery projective questions are used as a way to keep participants honest in their reactions to product. So, for example, if a respondent says she probably will buy a product, but the user imagery is of a "not me" person, it THE FLUX CAPACITOR

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becomes obvious that she was only being polite in her response to the purchase interest question and is not really interested. Car owner imagery is often expressed as this ego ideal or shadow. As discussed later, see the difference between the BMW driver vs. the Mercedes driver.

Other times, user imagery refers to a more realistic depiction of the actual consumer. We have an example of that below in the cough medicine story.

But now let's move to brand imagery.

For me as a researcher, one of the most powerful illustrations of the influence of brand became evident in a study I was doing on a new mouthwash a number of years ago.

One of the groups was comprised of consumers who were heavy users of green Scope. They were given three unbranded samples of green mouthwash to try. One was the new brand, one was Listermint and one was green Scope. Not knowing which was which, it was amusing to see a bunch of dedicated users all turn up their noses at their beloved brand, Scope.

Unbranded, it "tasted awful."

One man actually spit it right back out into the cup with a look of revulsion on his face.

Even more amazing was what happened later. After a period of time when taste buds were allowed to return to a more normal state, the same people were given branded versions of the identical products to try.

When they swished with the branded Scope sample, big smiles broke out on their faces. Comments like, "Now

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that's MY Scope" were made." Even the man who hated Scope when he originally tried it unbranded, was a strong voice in the "We Love Scope" chorus. Inside, I just had to shake my head in amazement at the impact of a strong brand identity.

In certain categories and with certain products, the personification of brand imagery is close to a consumer's aspirational model. We see this with status type products like cars, cosmetics, wine, clothing. So, for example, some one who would be interested in driving a BMW might describe it as a sharp, smart, fast, sexy and eloquent Pierce Brosnan type in the latest James Bond movie. In contrast the Mercedes might be described as Michael Bloomberg, a savvy, clever billionaire businessman who goes where he wants to go in-style. It's easy to see how a personification of the brand and the aspirational user images could overlap in these cases. The BMW purchaser or aspirer wants to be seen as an educated car owner, who knows great value even though it might be cost more.

This is an elegant but relatively understated type of person.

The Mercedes owner is flashier, parading wealth in addition to making smart choices. So while the similarities in images are evident in this case, in most other categories there are important differences between the images of the brand and the user.

There is a tendency for clients and moderators to use personification techniques to get at brand images. We're often asked if we could "get them to do a brand party",

where all the brands come to life and get together as their anthropomorphized selves.

WATCH OUT. When you ask people to talk about a personification of a brand, there's a danger that instead of talking about the brand characteristics, they will flip flop to the user. It's fairly tough to ensure that respondents clearly distinguish between brand and user imagery when they are talking, (and sometimes even when brand managers are talking!). Here's an example which really illustrates the difference. Let's talk about OTC cough syrups.

Let's work with Vicks 44 to start with, and imagine that we asked people to personify THE BRAND. The Vicks 44 brand might be described as a very strong truck driver who is a little gruff but always gets the job done. Whereas THE USER of Vicks 44 might be a very concerned wife who wants to give her husband something that is really going to take care of his cold and his cough.

In this example, you can see two very different images.

While the brand is male and strong, the user is female and soft and perhaps even a little frightened. The brand is confident. The user is worried and is therefore looking to the brand to do this job that will make her feel more selfassured.

Also, the confusion between brand and user imagery is not limited to consumer products.

Sometimes even the brightest respondents have trouble with this; even, and perhaps especially, when you're talking to physicians about pharmaceuticals. For example, there is an anti-

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anxiety medication that does its job in protecting patients from anxiety attacks but also makes the user (often young women) gain weight. When physicians brought this med to life at a party, they described an obese woman.

med imagery was obtained via analogy instead of personification, it might have been described as an exquisite chocolate truffle that was beautifully designed, delicious, soothing and comforting but very fattening.

Because brand and user imagery is often very rich and sometimes the most interesting part of a focus group, clients have a tendency to get distracted and forget to clarify the difference. (I'm so often forced by a client who thought a brand personality party they saw previously was really cool, to have them personify the brand so that they can hear them tell this cute story... without realizing whether that story relates to the brand or the user).

An interesting way to get at both brand and user imagery as part of the same exercise is using a car and driver analogy.

This approach yields clearly distinct associations for the brand vs. the user. You simply ask participants, "What if this brand were a car?", and then get them to describe the car in detail, make, model, color, year, features, . There are the roots of your brand imagery.

Then you ask "OK, now who do you see driving it?" ... that's the user imagery. A little structure and simple education like this goes a long way towards clarifying brand vs. user image in both the respondent's and the back room viewer's minds.

When you are moderating, if you see the group going down a road where they're having trouble differentiating the brand characteristics and the imagery from the user characteristics, just stop midstream and say something very simple like "OK. From what you're saying I can't quite tell... are we talking about the brand and what it would be if it were alive or are we talking about the person who uses it?"

It's really OK to stop in the middle of an exercise. The client will actually realize why you did that and you will look smarter than if you let it go, in which case they might think "Hey, wait a second. This is not the brand. This is the person who uses the brand.

This exercise did not work."

To avoid this dilemma you might consider using different imagery exercises for the brand portion vs. the user portion. There are many, many exercises to elicit impressions of brands that go beyond turning them into people. For example, if the anti-anxiety www.Futures-studies.org

Let's go through another example. Let's say we're looking at 3 different brands of bottled water. There's Poland Springs, there's Evian and there's The Looking Glass.

(We have our own bottled water in our facility... excuse my shameless plug).

So, there's the Looking Glass bottled water, there's Poland Springs and there's Evian.

What you say to the respondents is something like, "I want you to imagine that these three bottles turn into cars at night.... and now, I want you to listen as you can actually hear the motors of these 3 cars revving up." (Make it fun and engaging. Be dramatic, wave your hand like a magic wand, use an intriguing tone of voice ... ) "The doors. The garage doors are about to open. Behind the doors is the Evian car, the Poland Spring car and the Looking Glass car.

And as the door is opening, again we can hear them revving up. I want you to imagine which vehicle each would be. What does it look like? What color is it? What year? What make? What model? And imagine the person sitting inside, what the upholstery is like, all the different bells and whistles inside. Describe it in your mind. Get a picture. Feel what it's like to sit in it. Experience it. And as the garage doors open and it begins to drive out, you also can actually see the person who's driving it.

So, I want you to create 3 stories for me, 3 different images, 3 senses. One is of the car itself and the other is of the driver."

The car and driver exercise is a very exciting and rich way to get some quick imagery of both the brand and the user.

And it distinguishes the two in a meaningful way. It is easier to discern how the brand is like the specific car and how the user is like the driver. You can then query people about the tie back. "You said The Looking Glass water is like a BMW and Poland Spring is like a Land Rover. What are all the words you would use to describe a BMW? A Land Rover? What is it about The Looking Glass water that is like the BMW you just described? How so? And what about the Land Rover and Poland Spring? Similar probes can be asked for the BMW and Land Rover drivers.

There are so many other projective exercises you can use to understand brands that do not personify the product.

They're so much easier to read against the user imagery.

But, if to please you're client you need to do a personification of brand, just remember to watch out for confusion between brand and user.

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Featured Reader Henriette Weber Andersen and Daniel Karpantschof met some five-six years ago, when Henriette founded GeekDinner Copenhagen; a reoccurring dinner event for well... geeks.

In all ways, shapes or forms, from the trekkies and coders to the designers and bloggers across the spectrum, geeks met, got drunk and went each way.

Since then they have worked on numerous projects together, along with a The Copenhagen Protocol, a large conflict simulation North of Copenhagen, about the future of European integration, terrorism and freedom.

What are your greatest expectations for 2010?

I hope that the world will become a better place, filled with more dreams, creativity, innovation and guts.

Henriette Weber

guess I try to reinvent the wheel when I work - it sets high standards - but it also makes the process much much more exciting and creative.

Have you ever had an experience where you foresaw something and it turned out exactly that way?

I guess that's one of the positions for me. For me it's more a problem of holding on to it and not hurry on a moving forward and start preaching something else before "old stuff" becomes mainstream.

There's a lot of the things happening right now that I have been talking about for ages. It's such a hard task for me to have been going from that everybody thinks my thoughts on business are crazy and deranged and then thinking that I am a brilliant genius.

Founder and CEO, ToothlessTiger Hometown Copenhagen, Denmark Email henriette@toothlesstiger.net

How do you apply the “future” to your work?

It sounds kind of funny but I guess I am just gifted in that way. No a large part of it comes from humor and meditation.

Walking the dog and training is when my best ideas comes up. I

Link ToothlessTiger.net Known Karpantschof since Fall 2005 Mutual Friends on facebook 33

What’s up Karpantschof?

Daniel Karpantschof lives in Washington, DC from where he writes articles, gives speeches and talks and contemplate world domination.

Daniel Karpantschof sits on the board of directors of the Copenhagen Institute for Futures Studies as well as the Academy of Futures Studies in Denmark, chairs the Advisory Board and the board of TalentTuning, a DanishNorwegian consulting house.

Recently Karpantschof was asked to sit on the Advisory Board of DABGO/Danes Abroad Business Group Online!

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The Flux Capacitor is the free newsletter from Daniel Karpantschof, covering innovation, strategic planning, foresight and scenario building within the spheres of international markets and politics, fast moving consumer goods, education, entertainment and tech.

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